HERE is a Surprise

While the Hydrogenerate site has been down for some time and appears not to have been updated since early 2004, the Hydro Environmental Resources Europe site is still up. While they mention the "independent gas analysis was conducted in Hillboro, Oregon proving the effectiveness of the ECHFR system", they neglect to discuss the economic analysis presented in the full report:

VANCOUVER, Wash., Aug. 26 PRNewswire-FirstCall -- Mr. David Rosenberg,Chief Executive Officer made the following statement, "On August 14, 2002,HERI staff took the recently repackaged industrial Electrochem Hydrogen FuelReactor (ECHFR) to FST Consulting International, Inc. in Hillsboro, Oregon for independent third party testing and analysis. The purpose of this analysis was to certify the purity of hydrogen gas being produced by HERI's industrial grade ECHFR."

Dr. Michael Lysaght, Chief Science Officer stated, "Sample measurements were taken periodically over a period of several hours with hydrogen gas purity improving from a low of 99.99% to a high of 99.9992% during the courseof the reaction. It should be noted here that this unit was an industrial configuration of the ECHFR and not fully optimized for gas purity. HERI is currently developing a high-purity stainless steel reactor that is expected toimprove hydrogen purity to the six nines purity level. This latest design ofthe ECHFR will address emerging fuel cell technologies and the semiconductor industry where high purity hydrogen gas is a requirement. Additional information will be posted on the HERI website (http://www.hydrogenerate.com) after the initial testing phase." He further stated that, "It has long been HERI'smission to produce the highest purity hydrogen gas as inexpensively as possible. The FST report details the purity of the hydrogen gas effluent as a function of time while the HERI Lab Report provides a cost analysis for the reaction described in the FST report." Dr Lysaght, provided the following results from FST's analysis of the ECHFR:

Component Description Cost
A 8 oz consumable A @ approximately $ 0.70 lb. $0.35
B 12 oz consumable B @ approximately $ 0.40 lb. $0.30
C 1.5 gal water base negligible
D 1.05 oz catalyst no recurring

costs Total cost of reactants $0.65
Cubic feet hydrogen gas produced 10.78
Cost per cu. ft. of hydrogen gas $0.06

Dr. Lysaght noted that the "detailed figures do no include packaging costsand will vary depending on application, size of reactor, and gas purityrequired. Specific efficiency data can be provided upon request based on gas purity required."

SAFE HARBOR PROVISION With the exception of historical information contained in this press release, the matters described herein contain certain "forward-looking statements" that are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current reasonable expectations and are subject to certain assumptions, risks, uncertainties, and changes in circumstances. Acts or results may vary materially from those expressed or implied from thestatements herein or from historical results due to changes in economic,business, competitive, technological, and/or regulatory factors. More detailed information about these factors is set forth in filings by Hydro Environmental Resources, Inc. (OTC Bulletin Board: HYVR) with the Securities and Exchange Commission, including the most recent Annual Report onForm 10-KSB and the most recent Quarterly Report on Form 10-QSB. Hydro Environmental Resource, Inc. is not obligated to (and expressly disclaims any obligation to) revise or update any forward-looking statements in order toreflect the events or circumstance, whether they arise as a result of new information, future events, or otherwise.

The 6 cents per cubic foot of Hydrogen is not a good price. Using the Ideal Gas Law Calculator we can see that a cubic foot of Hydrogen is 1.2634 moles. The Hyperphysics Electrolysis page gives the energy for burning Hydrogen as 285.83 kJ/mol. So a cubic foot could be 361.12 kJ. The DOE Energy Ant gives the energy content of gasoline as 130.88 mJ. So a gallon of gasoline has he energy of 360 cubic feet of Hydrogen, but costs only 45X as much as Hydrogen from the ECHFIR. Gasoline is an 8x better value.

The company later tried to change the focus away from the uneconomical cost of Hydrogen to the value of the by-product. Since the patent application has published, we know the "valuable byproduct" is Al(OH)3. Not really that valuable. Hydrogenerate went as far to announce that they had sold some of that stuff. They stopped reporting before announcing how much (little) they sold it for.

Hydro Environmental Resources announces first sale of chemical by-product and conclusion of field test

VANCOUVER, Wash., Jan. 22, 2004 (PRIMEZONE) -- Hydro Environmental Resources, Inc. (OTCBB:HYVR) Interim-CEO Mark Shmulevsky said: "We are pleased to announce our first sale of the by-product produced during the production of pure commercial-grade Hydrogen at low-pressure in our reactor. Over the past 12 months, we have completed all necessary testing and third-party lab analysis of the byproduct for content and purity. We have begun the process of identifying strategic partners interested in the purchase of these chemical by-products. Our by-product has a number of uses in both commercial and industrial applications. The by-product can be easily removed from our vessel after the initial materials have been chemically consumed during the production of hydrogen. We believe the added revenue opportunity from the sale of these by-products, coupled with the production of hydrogen gas and recoverable heat energy produced, continue to make our technology extremely viable and cost-effective in the growing alternative energy industry."

Each reactor, based on application size put in production, will yield a known amount of recoverable, sellable by-product.

The company also concluded field testing of its reactor installed in the home of former CEO David Rosenberg. During its testing, Mr. Rosenberg hosted Oregon U.S Senator Ron Wyden. During the visit, the senator was shown the unit being utilized in the application of supplying hydrogen and heat energy.

The unit was installed to supplement the existing hydronic heating system. This was the company's first field testing of the unit's development of both the unit's heat exchange process and by-product recovery. The field test has confirmed the overall cost of producing hydrogen to be significantly reduced through the capture and use of both the heat energy and by-product recovery.

About Hydro Environmental Resources

Hydro Environmental Resources, Inc. holds the rights to the Electrical Chemical Hydrogen Fuel Reactor (ECHFR), which is one of the first hydrogen reactors that eliminates the need for an outside energy source to produce a pure commercial-grade of hydrogen at low pressure. This proprietary process delivers a highly mobile, more cost-effective and physically safe production of hydrogen than alternative methods which require outside energy sources such as electricity, solar power and fossil fuels. The Company (HERI) was founded in 1998 with the primary goal of exploring avenues to improve the global environment through the development of safe and efficient methods of alternate energy production. The HERI team is focused on the production of alternate energy in the form of hydrogen gas, heat recovery, and waste treatment, clean and potable water, through its breakthrough technologies. Today the ECHFR can provide environmentally safe and cost-effective hydrogen and heat energy to meet the needs of the enormous alternative energy industry.

Safe Harbor: cut

Another doomed Hydrogen from water scheme has recently jumped on the valuable by-product bandwagon. What's old is new again when we next review AEC.